A retired auto mechanic hopes to open a customizing shop for installing heated or ventilated seats. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly costs of $6,975 and labor, materials, and transportation costs of $30 per car. The outside location would have fixed monthly costs of $4,375 and labor, materials, and transportation costs of $38 per car. Dealer price at either location will be $99 per car.
a. Which location will yield the greatest profit if monthly demand is (1) 340 cars? (2) 440 cars?
b. At what volume of output will the two sites yield the same monthly profit? (Round value to the nearest whole number.)
